19For the following combinations of audit evidence, rank the items in terms of their reliability from least reliable to most reliable:

A Audit firm conducts the physical count of inventory			B Internal audit reports on the physical count of inventory	C Auditor supervises internal audit conducting the physical count of inventory
			A, B, C
			B, C, A
			C, A, B
			A, C, B

20Which of the following is not true in relation to external confirmations?

		They are highly reliable.
		They are expensive to perform.
		They are time-consuming to collect.
		It is mainly liabilities that require external confirmation.

21External confirmations are least likely sent to:

		third parties holding the client's inventory.
		the client's customers.
		the client's lawyers.
		the clients suppliers.

22Attitudes and rationalisation to perpetrate a fraud include all the following except:

		There is a high turnover of internal audit and information technology staff.
		Management does not place a high priority on ethical standards.
		Management shows an excessive interest in increasing the entitys share price.
		Management attempts to justify marginal or inappropriate accounting on the basis of materiality on a recurring basis.

24Knowledge of related parties is important in obtaining an understanding of the clients business because:

		there may be a large volume of transactions between related parties.
		the value of transactions between related parties may be high.
		the transactions may be between numerous related parties.
		they may not be transactions that take place at arms length.